CEO FRIDAY: How To Disrupt Your Industry (1/6)

Last week I gave a brief talk at the AlwaysOn OnMobile 2011 conference titled “Disrupting the Enterprise” (video). It was pretty well received, and I promised to write up more that Friday. Well… it’s two Friday’s later, so here goes.

To start, this isn’t really about Expensify. It’s about the conditions that allow Expensify to exist — conditions that simply weren’t true a few years ago, and at least one condition that will probably never be true again. It’s about conditions that I’m theorizing affect (or could affect) more industries than just expense reporting, including maybe yours? If so (or if not) I’d love to hear from you in the comments. Because ultimately, my goal is to learn if our experiences are unique, or if we’re just missing something, or if maybe we’re actually ahead of the curve and have some valuable lesson to share. Whatever it is, let me know what you think.

Condition #1: Consumerization of I.T. == Employee Empowerment

The hip term used to describe the first of these conditions is the “consumerization of I.T.”. I think that name is supposed to convey that “information technology” departments (does anybody even use that term anymore?) are grappling with a massive influx of consumer products brought into the work environment. As best as I can tell, this really started in earnest when people started bringing Macs to PC-only shops. They didn’t ask permission, they just sorta plugged in and got to work.

(In my case, during my very brief “experimental” time after I left Windows and before I adopted Ubuntu, I had a Mac. It was during that short window that my tiny startup was acquired by a very large company, the sort that uses the term “IT” with a straight face. At the time, they didn’t officially support Mac: none of their custom tools worked on it, and it violated all sorts of internal company policy to even plug in an unauthorized device. They gave me and my team PC’s and instructed us to use them. Instead, we imaged the hard drives and installed them on Mac VMs — to use in those rare instances we needed them — and then ported the tools we needed to Mac. It took a day, and made questionable use of some SSH proxy servers placed strategically on the internal network, but on day two we were productive again.)

I’d wager that in most cases, IT didn’t even realize this was happening until they strolled by somebody’s desk and saw the wrong color laptop plugged in to the corporate LAN. If they said anything at all, the conversation probably went like:

IT: “Hi there, we don’t support Macs.”Employee: “It’s what I need to be productive, go talk to my boss.”IT: “Ok…”(one day passes)IT: “New policy, we support Macs!”

I think Macs led the charge, but then iPhones followed suit in BlackBerry shops, DropBox followed suit in SharePoint shops, etc. The specific pairings of corporate/consumer technology are debatable — and I don’t know that one always replaces the other versus just obviates it — but I think the results aren’t: more and more, when employees want something, they get it. Maybe not always, and maybe moreso in smaller companies over large, but it’s a growing trend that I don’t see reversing anytime soon.

Which is why, incidentally, I don’t like the ambiguous “Consumerization of IT” term. Not only is it straight up unclear, but it emphasizes the wrong thing. Whether the technology is “consumer grade” or not is far less important than who picks it. And the key point is it’s the employee who is doing the picking. In an area where employees previously followed strict IT policies, they are now empowered to make their own choices. This is why I prefer to call this trend one of “Employee Empowerment”.

Why you should care: Previously, if you wanted to sell into an enterprise, you had no choice but to go straight to the policymaker. But now there’s an opportunity to enter the enterprise through the back door: the employees themselves. If you can find a way to get employees to individually and proactively adopt your product, then they sell you to the policymaker when that time comes. Which is great as they know the local conditions and political landscape better than you. It’s like having an “inside man” championing your every sale.

Expensify example: Once upon a time there was a company that processed a lot of expense reports using paper printouts of Excel spreadsheets with physically affixed paper receipts. On a bright and sunny day with magic in the air, a department manager takes the next of an endless series of expense reports off a tall stack of envelopes, only to find that it is a printout of something called Expensify. All the same information is there, all the receipts are there… just not in the format expected. He sets it aside. Later, he finds another employee has done the same — an employee on the other side of the country, who likely has no interaction (or coordination) with the first. Eventually enough employees have done this that he reaches out to Expensify to start a trial. While the trial is ongoing, more employees — without even knowing Expensify is being trialled by the company — submit Expensify reports. Sometimes via printouts, sometimes by emailed PDFs, and sometimes submitted online using the service itself. Eventually that department adopts. Then other departments. Now everyone uses Expensify and they’ve just finished processing their 5000th Expensify report. All due to a few proactive employees just trying to be productive.

Tune in next Friday to learn how “Word of Mouth is now Winner Takes All”. (Follow us on Twitter at @expensify to be notified when it comes out.) See you then!

5 responses to CEO FRIDAY: How To Disrupt Your Industry (1/6)

I don’t know that your experience are complete unique, but I don’t think it’s the “norm” either. You were after all probably a “hot shot” within your company after being acquired. :)

My experience with IT departments in my previous two jobs was probably the most constant “fire in my stomach” motivation to escape the corporate culture and politics. In both companies, I felt that the IT department and their policies, decisions, and implementation of tools and software was a sad and ridiculously crippling aspect of the company as a whole. IT departments and its relationship to the bright employees at the company is that of the ‘ol ball and chain. I side with Nicholas Carr’s perspective on IT. First in his article “IT Doesn’t Matter” from 2003, and now more recently with his thoughts in the book “The Big Switch”

In “The Inmates are Running the Asylum” Alan Cooper argues that business execs aren’t in control because they’ve put the programmers and engineers in charge, wasting money and ignoring their customers. Now software companies have realized the need to hire good user experience designers and balance product development with good design. A similar position will emerge with IT, as companies adopt, and adapt to the Cloud and what it has to offer.

Companies with a leadership team that agrees on the long term vision to push for outsourcing more IT processes and business processes (such as expense reporting) to super niche software & services such as yours WILL be able to ride the new wave, and compete in the new landscape.

Readers may be interested to watch the educational documentaries I wrote and directed, ‘People Power for Staff’ and ‘People Power for Managers’. They are now free to view on my YouTube channel at EyesEars.com